How to manage insured incidents in a fleet

In a fleet, insured incident management does not always receive the attention it should. In most cases, insured incidents are treated like any other type of risk in transport operations.

“What sets an insured incident apart from another type of risk?” is a question you may have asked. In brief, these are the types of accidents and events in which an insurer is involved in paying compensation to the company.

Learn more below:

• What an insured incident is;
• What fleet insured incident management is;
• What insured incident management is used for;
• How insured incident management works;
• How to manage insured incidents in a fleet;
• What the benefits of insured incident management are.

What is an insured incident in a fleet?

An insured incident is defined as an accident or any damage to an insured asset. In a fleet, we can understand it, for example, as an unintentional traffic accident during a transport operation.

Even if the accident is unintentional, it may be the responsibility of the driver or fleet management, as in accidents caused by mechanical failures. This is because the vehicle needs to undergo regular inspections, and it is the manager's duty to ensure they happen.

Besides this cause, insured incidents happen due to vehicle misuse and natural conditions such as rain, falling trees and fires.

The most common types of insured incidents are:

• Robbery and theft;
• Traffic accidents;
• Third-party damage;
• Natural causes.

It is also necessary to know the classification of insured incidents: 

• Minor damage: this includes the simplest types of insured incidents, which require smaller, more superficial repairs. 
• Moderate damage: at this level, the vehicle must undergo an inspection and repair assessment to identify what compromised its operation and when it will be fit for use again.
• Severe damage: these are more serious insured incidents, in which the vehicle is a total loss.

What is insured incident management?

Insured incident management is a set of actions focused on bringing greater safety and predictability to fleet and transportation management. There are always two parties involved: the company and its insurer. 

When activities are developed and implemented to reduce the chances of an insured incident happening or to provide/receive support if it does, these are insured incident management processes.

What is this type of management used for?

In general, the goal of insured incident management is to reduce the chances of an insured incident happening in a transport operation. It also serves as a support strategy and provides protocols on how to deal with each situation defined as an insured incident.

For this reason, it is an area directly related to fleet risk management, which identifies the likely risks the fleet may face and what the solutions would be in each situation.

How does insured incident management work?

It follows an agreement with the insurer, with the situations in which insurance will cover accidents and the types of insured incidents for which it takes full responsibility defined in advance.

We can distinguish between partial and full coverage for insured incidents: 

With partial coverage, the insurer covers only part of the issue, while full coverage provides complete reimbursement of the amounts incurred as a result of the insured incident.

How do you manage insured incidents in a fleet?

You need to understand the fleet's risks and which of them qualify as insured incidents. After gathering this information, you should assess the best measures to take in each case to create an action protocol.

Even if the action is to contact the insurer, this must be described in your Fleet Policy and fleet employees must be informed. This way, you ensure that plans are followed efficiently.

Other actions you should consider for fleet insured incident management are vehicle care, preventive maintenance, route planning and real-time monitoring of operations.

The manager needs to know the insured incident management plan thoroughly, because in some cases the insurer may not cover a specific type of insured incident that is more complicated to deal with, such as robbery and theft.

What are the benefits of insured incident management?

The benefits are fewer unforeseen events, greater efficiency in fleet activities and savings in transport operations.

As the company's processes become clearer and better implemented, problems are reduced considerably, especially those over which the fleet can have more control.

For example, by planning less dangerous routes, defining the times to drive a route and taking care of each vehicle's operating condition.

In this context, the losses incurred include lost cargo and goods, sometimes even the vehicle itself. The company may also face labor lawsuits, depending on the situation. 

All these factors, individually or combined, put a major financial strain on the fleet.

Start organizing your fleet insured incident management and learn what else brings productivity and savings to everyday transport operations. Download our free guide (in Portuguese).